Hello mikeriley, Great post , I like your style I think I understand what you mean by "#3 Follow strict money/risk management." However, so that I am clear , can you please share some meaning and examples of what you mean by #3? Thank you buddy
I follow a 3 - 6 ratio. I keep trading until I've amassed 3 wins or 6 losses. Of course, some days this may take a multiple of trades. Average is within 5 to 6 trades. (3 wins = net profit of 540.00 vs 6 losses = loss of 1080.00) Key point: I NEVER over-trade once I've reached either 3 wins or 6 losses. Knowing when to STOP trading is EXTREMELY IMPORTANT to me. Excellent book for developing risk management protocol "A Traders Money Management System" by Bennet McDowell
Hello mikeriley, Thank you for explaining. I understand what you mean, knowing when to stop manually trading is important. My risk/money parameters for manual trading is 1. 30 minutes per day of pure focus, afterwards STOP trading. 2. Daily Profit Target $30-$50, afterwards STOP trading. 3. Daily Loss Target $75, afterwards STOP trading. Key point: I NEVER over work myself and over think myself in real time. Thank you for the Book recommendation.
You're very welcome SimpleMeLike. I know some people get hung up on their P/L. But, the system of 3 - 6 ratio is not about a shining P/L. It teaches you how to be more selective in the decision making process on which trades to take, and then ONLY take trades that have a high chance of winning. In the beginning, losses are the norm. But with disciplined, and consistent practice, I've learned to have many days 3 & DONE. (3 wins and trading day is over)
Hello mikeriley, Thank you very much for the follow up . You actually make a good point indeed. The part in blue is something to think about. Being selective on trade amount, rather than PnL. I think your 3-6 system forces you to be patient and discipline waiting on those high probability setups as well. Question: Just to make sure I understand you better. You would stop trading if the following occurred right? trade # 1 loss trade # 2 win trade # 3 loss trade # 4 win trade # 5 loss trade # 6 win 3 wins, stop.
Thank you Mr.mikeriley, Great discussion. Your risk/money management is a good way to prevent over trading. I agree.
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That's a horrible, flawed, failed, ratio, How do you expect to win overall in the end with $30 profit targets and $75 loss targets, Let's assume you are a common, average, trader, and your accuracy is just around 50%....that's a completely flawed, broken, model, It amazes me you fail to see that weird logic, No one has edge, skill, process and understanding with trading....and yet, they magically feel they will profit and come out on top in the end,
Good Evening MacBookPro, Please share with me exactly how to make +$200,000 this year trading futures please. Thank you,